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Florida Rejects Air Services Privatization Bid

Leonard Gilroy
July 30, 2009, 8:36pm

Mark Caputo at the Miami Herald reports that Florida officials have rejected a bid to privatize the state's air service operation that would have saved taxpayers an estimated $600,000 a year:

The head of the agency that manages the state's controversial air service for politicians has decided against privatizing the operation, even though a low bidder pledged to save taxpayers up to $600,000 yearly.

Linda South, the secretary of the Department of Management Services, said in a written statement that she canceled bids to have a private company run the air service because her agency provides "the best quality service at the best value."

The low bidder was incredulous. "It's a load of junk," said Robert Feindt, a pilot and bid negotiator for Craig Air Center. "Why don't they want to save taxpayers money?" Feindt said South was trying to protect her agency's turf.

The state agency decided to consider bidding out the air operations after a recommendation from legislative analysts, who noted in an October report that flying state politicians and employees has grown in cost. [...]

The complex bidding process was divided into multiple parts. But overall, bidders were asked how much they would charge in two scenarios:

• Complete privatization, in which the state would sell its planes and the private company would provide the aircraft, pilots and mechanics. Craig Air Center bid $2.1 million, compared to the $2.7 million it cost the state this year.

• Partial privatization, in which the private company would provide the pilots and mechanics but operate the state's existing planes, a King Air turboprop and a Cessna Citation business jet. Craig Air bid $640,000, compared to the $864,000 that DMS currently charges.

[...] At least one high-powered legislator, Senate budget chief J.D. Alexander of Lake Wales, said he was concerned with DMS' decision to cancel the aircraft operation bids. "In these times, we need to save every penny we can," said Alexander, a frequent critic of state contracting and state plane use. "If we have a vendor who could save us $600,000, imagine how many kids that could help in our budget."

The discussion over cost savings in this piece obscures something very relevant. There's nothing inherently governmental about air services, which clearly failed the "Yellow Pages test" here since private bidders actually competed for a contract. As I discussed here, in these fiscal times governments need to be seeking every opportunity to get government out of the business of business and refocus on core priorities and services.

I reported on a similar issue in Florida in a 2006 issue of Privatization Watch, which focused on state universities and agencies engaged in direct competition with private sector cartographic and geospatial industry firms to provide commercial aerial mapping services.

» Reason Foundation's Privatization Research and Commentary


Leonard Gilroy is Director of Government Reform


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